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Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Budgeted Cost $
Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Budgeted Cost $ 2,625,000 Patient services Building cost 32,000 390,000 Activity Cost Driver Surgical hours (SH) Number of patients Square feet Budgeted Activity Usage 15,000 400 3,900 The two main surgical units and their actual activity usage follow. Actual Activity Usage Surgical Service General surgery Hours 4,400 Orthopedic surgery 10,600 Required: Patients Square Feet 300 100 910 2,990 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. 1. Compute activity rates using activity-based costing. Activity Supplies Patient services Building cost Budgeted Cost Budgeted Activity Usage Activity Rate 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. General surgery -----Activity Usage----- -----Activity rate----- Allocated Cost Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost Overhead cost per patient -----Activity Usage----- ------Activity rate----- Allocated Cost
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